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Chandrasingh and ors. Vs. the Board of Revenue and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberD.B. Civil Writ Petition Nos. 3276 of 1974 and 145 of 1977
Judge
Reported in1981WLN666
AppellantChandrasingh and ors.
RespondentThe Board of Revenue and ors.
DispositionPetition allowed
Cases ReferredIn Queens College Kanetra v. Collector
Excerpt:
rajasthan goverement grants act, 1961 - section 3--application of--satisfaction of 3 conditions.;before section 3 of the act of 1961 can be applied, the following conditions must be satisfied : (i) that there must be a grant or other transfer of land or of any inerest therein; (ii) that the grant or transfer of land should be made by or on behalf of the central government to or in favour of any person whom so ever; and (iii) that such transfer and grant should be construed and take effect as if neither of the acts mentioned therein had been passed.;(b) constitution of india - article 299--application of--valid contract--3 requirements of.;in order to comply with the requirements of the article, the contract (i) must be executed by a person duly authorised by the president or governor, as.....s.k. mal lodha, j.1. by these two separate writ petitions, chandersingh and the state of rajasthan, under article 226 of the constitution of india seek to quash the order (anx. 8) dated august 13, 1974 of the board of revenue for rajasthan (here in after referred to as 'the board').2. a few facts leading to these petitions may briefly be noticed. the government of rajasthan gave on lease a large contract of land about 33,00 acres to the central government for a period of 16 years from 1955 to 1971 for the purpose of establishing a mechanized farm the central government had option to get the lease extended for a further period of 15 years on the same terms and conditions. the central state farm, suratgarh (for short 'the farm' herein) was rug by the central government through the ministry.....
Judgment:

S.K. Mal Lodha, J.

1. By these two separate writ petitions, Chandersingh and the State of Rajasthan, under Article 226 of the Constitution of India seek to quash the order (Anx. 8) dated August 13, 1974 of the Board of Revenue for Rajasthan (here in after referred to as 'the Board').

2. A few facts leading to these petitions may briefly be noticed. The Government of Rajasthan gave on lease a large contract of land about 33,00 acres to the Central Government for a period of 16 years from 1955 to 1971 for the purpose of establishing a mechanized farm The Central Government had option to get the lease extended for a further period of 15 years on the same terms and conditions. The Central State Farm, Suratgarh (for short 'the Farm' herein) was rug by the Central Government through the Ministry of Food and Agriculture, Government of India, from 1960 to 1969. It is said that in the year 1969, an autonomous Corporation in the name of the state Farms Corporation of India Ltd. (a Government of India Undertaking) was created for the better management of the farms and the administrative control of the Farm was transferred by the Central Government to this Corporation and since then, the Corporation is managing the Farm. The Central Government allotted 419 acres of land comprising of Chak No. 43 PBN to Chandersingh, who is petitioner in D.B. Civil Write Petition No. 3276 of 1974 under an Agreement (Anx. 1) dated September 8, 1969. The Agreement (Anx.1) is signed by Chandersingh as well as the Operational Manager (Agriculture). Central State Farm, Suratgarh. Under this Agreement (Anx 1), the petitioner Chandersingh was required to give 3 1/2 quintals of grain per acre to the Farm. He cultivated the land, which was allotted to him. When the crop was ready, Chandersingh moved an application (Anx. 2) dated May 13, 1970 under Section 148 of the Rajasthan Tenancy Act (No HI of 1955) (for short 'the Act' here in after) praying that an Officer be deputed to make division, estimate or appraisement in accordance with law since the Farm had refused to have a division of the produce mutually according to hw. A notice (Anx.3) dated May 13, 1970 of this application was issued to the Farm to show cause as to why action should not be taken under Section 148 of the Act by the Tehsildar. For appearance May 19, 1970 was fixed. No body appeared before the Tehsildar on May 19, 1970. Another notice (Anx.4) dated May 19, 1970 was issued to the Farm to appear by May 23, 1970, failing which the division would be made in accordance with law. On May 25, 1970, on behalf of the Farm, time was sought for filing reply. It appears from the order sheet (Rule 11) dated May 25, 1970 that the next date fixed was May 30, 1970. On that day, an application (Anx.5) dated May 30, 1970 was filed for stay of proceedings and for a direction to Chandersingh for referring the dispute to the Farm Superintendent under the arbitration clause of the Agreement (Anx, 1). By his order (Anx, 5) dated June 1, 1970, the Tehsildar rejected the application and appointed Surjaram to proceed with the division of the crop in accordance with Sub-sections (8) and (9) of Section 149 of the Act. Chandersingh deposited a sum of Rs. 1,17,000/- being the value of the produce of the land as directed by the Collector on the basis of the appraisement of the value of the crop mad by the Officer duly appointed for the purpose by him and the amount is lying in deposit there. Being dissatisfied with the order of the Collector the Farm preferred a revision petition under Section 230 of the Act before the Board. The document R-7 dated December 5, 1970 was filed before the Board. The Board by its order (Anx. 8) dated August 13, 1974 accepted the revision petition and held that the land in dispute is covered by the Rajasthan Government Grants Act (No. XX of 1961) (for short the Act of 1961) and hence no action can be taken against the Farm under the Act and that Chandersingh is bound by the terms and conditions contained in the Agreement (Anx 1) and in accordance with which he has to give 3 1/3 quintals of grain per acre to the Farm and in case of any dispute the matter is required to be referred to the Arbitrator specified in the Agreement. It is against this order of the Board that the petitioner Chandersingh has filed D.B. Civil Writ Petition No. 3276 of 1974 and the State of Rajasthan has filed D.B. Civil Writ Petition No. 145 of 1977 for quashing it.

3. We have heard Mr. H.M. Parekh, learned Counsel for the petitioner Chandersingh, Mr. D.S. Shishodia, learned Government Advocate for the State of Rajasthan and Mr. S.N. Pareek, learned Counsel for the Central State Farm, Suratgarh.

4. Before we proceed to examine the contentions raised by the learned Counsel for the parties, we consider it proper to reproduce the relevant part of the order (Anx.8) dated August 13, 1974:

10. To sum up, Chander Singh non-applicant No. 1 is a contractor of 419 acres of land of Chek No. 43 PBN given to him by the Central State Farm, Suratgarh under a written agreement dated 8-9-1969. The non-applicant No. 1 is bound by the terms and conditions contained in this agreement in accordance to which he has to pay produce rent to the Central State Farm and in case of any dispute, the matter is required to be referred to arbitrator specified in the said agreement. The non-applicant No. 1 should, therefore, comply, with this agreement as there is no other alternative to him. It is further held that the land in dispute is covered by the Rajasthan Government Grants Act, 1961 and hence any action could not be initiated against the Central State Farm, Suratgarh or the State Farms Corporation of India, Limited, who are nominees of the Government of India under he provisions of the Rajasthan Tenancy Act, 1955 in the present dispute. This revision is, therefore, accepted with costs and the orders dated 20-7-70 of Collector, Ganganagar and 1-6-70 of Tehsildar, Suratgarh are hereby set aside and it is directed that Chandra Singh non-applicant No. 1 shall pay the produce rent for the land given to him at the specified rate or cash price equivalent to the price prevalent at the time of rabi harvest 1969 as may be convenient at this stage and in case of any dispute, take recourse to arbitration as mentioned in agreement dated 8-9-1969.

The first contention raised by Mr. Parekh, learned Counsel for Chandersingh is that he was granted a sub-lease by the Farm by means of the Agreement (Anx.1) dated September 8, 1969 and it is clear from it that it was an agreement between Chandersingh and the Farm and as such, it was between two individuals and, therefore, Section 3 of the Act of 1961 is not attracted. He also submitted that Section 3 of the Act of 1961 is not applicable, for, the Agreement (Anx. 1) cannot be said to be 'by or on behalf of the Central Government' as it is not in accordance with Article 299 of the Constitution and further that it is not the case of the Farm that it was executed on behalf of the Central Government. He pressed that the Agreement (Anx. 1) is not in favour of the Central Government. On the other hand, Mr. S N. Pareek, learned Counsel for the Central State Farm submitted that Section 3 of the Act of 1961 applies, for, a perusal of the document (R-7) dated December 5, 1970 clearly shows that interest in land was transferred by the State Government in favour of the Central Government and as such at the time of the Agreement (Anx. 1), the Central Government was the owner of the land and, therefore, Section 3 of the Act of 1961 applies on the basis of the decisions in Surja Kanta v. Secy. of State AIR 1938 Cal 229, Ramanujam v. Ramaswami, AIR 1946 Mad 180 and Champalal v. Rameshwar 1967 RLW 943, Mr. Pareek submitted that Section 3 of the Act of 1961 applies to commercial undertakings.

5. We have bestowed our most anxious and thoughtful consideration to the rival contentions raised by the the learned Counsel for the parties.

6. Here, it will be useful to notice the relevant provisions of the Act, as well as of the Act of 1961. Section 5(12) of the Act defines 'Grant' as under:

(12). 'Grant' shall mean a grant or a right to hold land or interest in land in any part of the State and the person to whom such right is granted shall be called the 'grantee' thereof;

The material portion of Section 148 of the Act reads as follows:

148. Application for officer to make division, estimate or appraisement: (1) When the rent is payable by a division of the produce or is based on an estimate or appraisement of the crop

(a) if either the land holder, not being the State Government, or the tenant neglects to attend at the proper time, or

(b) if there is dispute about the division, quantity or value of the produce, an application may be presented by either party to the Tehsildar requesting that an officer be deputed to make the division, estimate or appraisement.

Section 149 of the Act provides for procedure on an application made under Section 148 of the Act. Sections 2 and 3 of the Act of 1961 read as under:

2. Transfer of Property Act, 1882 not to apply to Government grants.--Nothing in the Transfer of Property Act, 1882 (Centrel Act 4 of 1882) contained shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein here to fore made or hereafter to be made by or on behalf of the State Government or the Central Government to, or in favour of any person whom so ever, but every such grant and transfer shall be contrued and take effect as if the said Act had not been passed.

3. Certain laws not to apply to grants from Central Government.--Nothing contained in the Rajasthan Tenancy Act, 1955 (Rajasthan Act 3 of 1955) or in the Rajasthan Land Revenue Act, 1956, (Rajasthan Act 16 of 1956) shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein here to fore made or here after to be made' by, or on behalf of, the Central Government to or in favour of any person whom so ever; but every such grant and transfer shall be construed and shall take effect as if neither of the said Acts had been passed.

The other relevant Section which may be noticed is Section 32(8) of the Rajasthan General Clauses Act (No. VIII of 1955), which is as follows:

(8) 'Central Government' shall

(a) in relation to anything done before the commencement of the Constitution, mean the Governor-General or the Governor-General in Council, as the case may be,

(b) in relation to anything done or to be done after the commencement of the Constitution, mean the President,

and shall include, in relation to functions entrusted under Clause (1) of Article 258 of the Constitution to the Government of a State, the State Government acting within the scope of the authority given to it under that clause;

It is clear from Section 2 of the Act of 1961 that the Transfer of Property Act, 1882 does not apply to Government Grants, for it lays down that the provisions contained in the Transfer of Property Act, 1882 shall not apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein here to fore made or here after to be made by or on behalf of the State Government to or in favour of, any person whom so ever, but every such grant and transfer shall be construed and take effect as if the said Act had not been passed.

7. Section 3 of the Act of 1961 is a very important section and it, interalia, lays down that nothing contained in the Act or in the Rajasthan Land Revenue Act, 1956 shall apply or deemed ever to have applied to any grant or other transfer of land or of any interest therein here to fore made or here after to be made by, or on on behalf of the Central Government to or in favour of any person whom so ever, but every such grant and transfer shall be construed and shall take effect as if neither of the said Acts had been passed. Before Section 3 of the Act of 1961 can be applied, the following conditions must be satisfied : (i) that there must be a grant or other transfer of land or of any interest therein; (ii) that the grant or transfer of land should be made by or on behalf of the Central Government to or in favour of any person whom so ever; and (iii) that such transfer and grant should be construed and take effect as if neither of the Acts mentioned therein had been passed If the conditions specified above are not satisfied then Section 3 of the Act of 1961 will not be attracted. One of the conditions is that grant or other transfer of land or of any interest therein should be by or on behalf of the Central Government. Now we are required to examine whether the Agreement (Anx. 1) can be said to be by or on behalf of the Central Government as defined in Section 32(8) of the General Clauses Act (No. VIII of 1955). Document R-6 is the Resolution dated July 15, 1969. The material portion of it reads as under:

The Government of India have set up a number of Central State Farms for the primary purpose of production of improved varieties of seeds in different parts of the country. These Farms have so far been running as departmental organisetions but that arrangement has not been found entirely satisfactory. The Farms are essentially commercial organisations and should run as such unhampared by the procedures which govern the working of Government Departments. It has, therefore, been decided that a Company under the Company Law should be set up to take over and run the existing Farms as well as any Central State Farms to be set up in future. The State Farms Corporation of India Ltd. has accordingly been set up by the Government of India for this purpose and the Government of India have now decided to transfer all administrative control of the following Central State Farms to the State Farms Corporation of India Ltd. with effect from 1-8-69.

Central State Farm, Suratgarh (Rajasthan)

Central State Farm, Jetsar (Rajasthan)

Central State Farm, Hirakund P.O. Jharsuguda (Orissa)

Central State Farm, Jullundur City (Punjab)

Central State Farm, Hissar (Haryana)

Central State Farm Raichur (Mysore)

The Government have decided to transfer to the State Farms Corporation of India (Pvt.) Ltd. the movable and immovable property, assets including claims and actionable claims and liabilities of the Central State Farm by a formal deed or deeds of transfer to be executed later. The nature and form of the deeds would be determined later.

Document Rule 7 is the Agreement dated December 5, 1970 between President of India of the one part and the State Farms Corporation of India Limited, a Company registered under the Companies Act, 1956 of the other part. The relevant clause of the aforesaid Agreement is as follows:

In particular it is agreed that the Corporation will pay the land revenue, cesses, and other charges which were hither to being, paid by the Government or those charges which are to be paid by the Government hereafter under the terms of lease.

In case the Corporation fails to pay land revenue, rent cesses and other charges as indicated above, the Government of India may pay the same and in that event they will be entitled to recover the said amount from the Corporation.

The Agreement (Anx. 1) is dated September 8, 1969. The document R-6 in dated July 15, 1969. It makes mention that the State Farms Corporation has been set up by the Government of India. It was then decided to transfer the full administrative control of the Central State Farms mentioned therein to the State Farms Corporation of India Ltd with effect from August 1, 1969. The State Government gave the agricultural land situate in Suratgarh to the Central Government for running the mechanised Farm. The Agreement (Annexura-1) is between Chandersingh and the Operational Manager (Agricultural) Central State Farm, Suratgarh, in which, Chandersingh has been stated as the Contractor and the Central State Farm has been mentioned as the Farm. The agreement (Anx 1) contains Terms And Conditions for Allotment of Land. Clause (a) of the Agreement (Anx. 1) reads as under:

(a) The contractor will give 3 1/2 quintals of grain (gram) to the Farm irrespective of what yield he gets from the land allotted to him. There will be no relexation of this condition except in case of loss the crops due to hailstorms only, when the quantum of Farm share of produce will be fixed by the Farm Supdt. In the case of any controversy on produce, the assessment of Operational Manager (Agri.) will be the final.

The land will be given for tilling of Rabi 1969 only to such individuals who furnish surety in one of the following manners:

(i) Those possessing tractors will execute a bond that they will not dispose of the same during the contractual period and the Farm will have claim over such property in the event of the failure of the cultivator to fulfil the condition stipulated at above.

(ii) The cultivators who do not possess their own tractor will deposit a sum of Rs. 500/- per square with the Farm Supdt. by way of surety which will be refunded on termination of contractual period.

(iii) In addition to the above two personal sureties will also be furnished.

The Operational Manager (Agri.), Central State Farm, Suratgarh has signed it.

8. Article 299(1) of the Constitution of India is as follows:

(1). All contracts made in the exercise of the power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.

It is, thus, ovident that in order to comply with the requirement of the Article, the Contract (i) must be executed by a person duly authorised by the President or Governor, as the case may be; (ii) must be executed by such person on behalf of the President or Governor as the case may be; and (iii) must be expressed to be made by the President or Governor as the case maybe. It is well settled that a contract by Central Government or on behalf of the Central Government can only be entered into by an authorised person. There is nothing in the Agreement (Anx. 1) to show that the Operational Manager (Agri.) Central State Farm was in any way an authorised person to enter into the agreement on behalf of the Central Government. A perusal of the document R-6 dated July 15, 1969 shows that merely administrative control was transferred to the Corporation and the Operational Manager was not authorised to execute the agreement (Anx 1) on behalf of the Central Government. The document R-6 inter-alia recites that the Government have decided to transfer to the Corporation the movable and immovable property, assets including claims and actionable claims and debts and liabilities of the Central State Farms by a formal deed on deeds of transfer to be executed later and that the nature and the form of the deeds would be determined later. However, the argument of Mr. S.N. Pareek is that the State Farms Corporation, was the agent and this is being a finding of fact is not open to challenge in the writ jurisdiction. He has relied on State v. Oosman Haji and Co. : AIR1970Mad27 . The argument is futile, for, as stated above, the Agreement (Anx. 1) was between Chandersingh and Operational Manager (Agri.) Central State Farm, Suratgarh. The document R-7 is much after the agreement (Anx. 1) and it cannot be said to be by or on behalf of the Central Government as envisaged by Section 3 of the Act of 1961. It is not necessary to examine whether Section 3 of the Act of 1961 applies to commercial under takings or not.

9. It cannot be a grant as defined in Section 5 (15) of the Act. There is justification for the argument raised by Mr. Parakh, learned Counsel for the petitioner Chander Singh that there was no occasion for the Board to go into the question of grant, for, there was no foundation in regard to what has been stated by the Board in para 7 of its order.

10. Apart from this, it will be useful here to examine the contention raised by Mr. Shishodia, learned Government Advocate appearing on behalf of the State of Rajasthan that the Board has adjudicted the question relating to the grant without making the State as a party to the revision or for that matter to the proceedings. It was contended by him that the State was not a party to the proceedings under Section 148 of the Act. It was not a party to the revision petition, which was filed by the Farm under Section 230 of the Act. The question of grant has been decided without making the State of Rajasthan as a party. The State was not a party before the Tehsildar and the Collector and before the Board of Revenue. It was made party in the revision as the orders Annexure-5 and Annexure-6 were of the Tehsildar and the Collector respectively. The State was made party as representing the Tribunal viz. Tehsilder and Collector. The document R-7 was filed in the revision petition. According to Mr. Shishodia, the question whether there was a grant or not was a dispute between the State and the Central Government. Mr. Shishodia is not unjustified when he argued that the question whether any grant was made to the Central Government by the State Government of the land in question could not have been decided by the Board. He submitted that this dispute could be decided by the Supreme Court under the Constitution and further that what was the relationship between the State and the Central Government in regard to the land in question could be decided by the Board unless the Union of India was a party. As the Union of India as a legal entity was not impleaded before the Board, the State of Rajasthan had absolutaly no occasion to place the facts in regard to the land in question before the Tehsildar or the Collector or the Board prior to the order (Anx. 8) and to enter any plea about the terms and conditions on which 419 acres of land situate in Tehsil Suratgarh was allotted by the State to the Central Government. The Board was not right in determining the question of grant in the absence of the State as a party as it affected the rights of the State in respect of the land in question particularly when this question did not arise before the Tehsildar or Collector. For all these reasons, the order of the Board is had in law as the error of law is apparent on the face of the record. Section 3 of the Act of 1961 is not applicable and, therefore, the provisions of the Act are attracted.

11. The second contention raised by Mr. H.M. Parekh, learned Counsel appearing for Chandersingh is that the Board had no jurisdiction what so ever to direct that in case of any dispute the matter be referred to arbitration. Clause (m) of the Agreement (Anx. 1) is as follows:

(m) Any disdute out of the contract will be referred to the Farm Superintendent for settlement. If the decision of the Farm Supdt. is not acceptable to the parties, the matter will then be referred to the Operational Manager, whose decision will be final.

The notice (Anx. 3) of the application (Anx. 2) fixing May 19, 1970 was issued to the Farm to show cause why action be not taken in accordance with Section 148 of the Act. As no body appeared on behalf of the Farm, another notice (Anx. 4) dated May 19. 1970 was issued to the Farm fixing May 24, 1970 as the date of appearance. It is clear from the document R-11 dated May 25, 1970 that Shri Janaklal, Advocate filed power on behalf of the Central State Farm, Suratgarh. He took time on behalf of the Central State Farm, Suratgarh for filing reply. It was ordered that the case be put up on May 30, 1970. Document R-12 is the order sheet dated May 30, 1970. It appears that on June 1, 1970, an application by the counsel for the General Manager, Central State Farm, Suratgarh was moved stating, inter-alia, that the counsel for the Central State Farm had no knowledge about the arbitration clause and, as such, mere putting appearance cannot be said to be taking steps in the proceedings and that in that connection, evidence may be recorded. The question that; therefore, emerges is whether the Board could direct that in case of dispute recourse be made to arbitration.

12. The expression 'taking any other steps in proceedings came up or consideration before a Division Bench of this Court in Chitra Prakash Film Exchange Ltd. v. Motilal ILR 1953 Raj 1021. In that case, it was held that an application by the defendant for adjournment for the purpose of filing a written statement amounts to taking steps in the proceedings, and, therefore, when an adjournment is taken by the defendant for this purpose, he cannot, thereafter, make application for stay of proceedings under Section 34 of the Arbitration Act (No. X of 1943) (for short 'the Act of 1940' herein).

13. The same expression also came up for consideration in Joharimal v. Fatchchad , wherein, it was observed as follows;

The test determines whether step in the proceeding has been taken is not a subjective one. A pary cannot be entitled to say that he had no actual knowledge of the right under the arbitration agreement and that in fact he did not intend to give up his right. On the other hand, the test is objective and a person shall be deemed to have taken a step under Section 34 of the Act, if it can be held that he could have actual or construtive knowledge of his right in the event of exercising due diligence and that inspire of that he participated in the proceedings of the Court.

Prims facie, an application for time to file writien statement should raise a presumption that the defendant has actual or constructive knowledge of his right and that he acquiesced in the method adopted by the plaintiff. The presumption, however, is not absolutely irrefutable and can be rebutted by showing that even constructive knowledge cannot be imputed to the defendant. It is, however, not proper and fair to lay down that the presumption can be rebutted only on the ground that the defendants did not receive the copy of the plaint. In rare and exceptional cases, it may be rebutted by other circumstances.

The aforesaid decisions were relied on by another Division Bench of this Court in Bhanwarlal v. Insaf Ali . In that does, it was laid down that the matter whether the party has taken any step within the meaning of Section 34 of the Act by seaking an adjournment for filing a written statement Will have to be decided in the light of the facts and circumstances of each case but one has to start with a presumption that seeking of an adjournment by a defendant for the purpose of filing a written statement is a 'step' as contemplated by Section 34 and that in such a case, Court has no to see whether the defendant has been able to rebut the presumption by cogent evidence to the contrary.

14. Recently in Gokulchand v. Bhanwrilal (Civil Mics. Appeal No. 149 of 1979, decided on January 10, 1980) a Division Bench consisting of Dwarka Prasad and M. L. Shrimal, JJ considered this expression and held that the action of the defendant in seeking an adjournment for filing of written statement in the facts and circumstances of that case constituted a step in the proceedings within Section 34 of the Act of 1940.

15. The matter, however, stands concluded be State of U. P. v. Janki Saran : [1974]1SCR31 . In that case, their Lordships of the Supreme Court observed as follows:

Taking other steps in the suit proceedings connotes the idea of doing something in aid of the progress of Court for the purpose of adjudication of the merits of the controversy in the suit.

In that case, an application was moved by the District Government Pleader for filing written statement. A plea was raised that the application for adjournment was not made on instructions and was unauthorised and that he appeared as a mere volunteer not available to defendant State. The argument was negatived. In that context, their Lordships of the Supreme Court further observed as under:

If the application was for adjournment for the purpose of filing a written statement, then there is no question of any exercise of discretion by the trial Court. Discretion with regard to stay under Section 34 of the Arbitration Act is to be exercised only when an application under that Section is otherwise competent Incidentally it is worth noting that even the order of the trial Court is not included by the appellant in the paper book and we do not know the reasoning of the Court for granting stay. But on the view that we have taken that omission is of little consequence.

It is clear that on May 25, 1970, Shri Janaklal, Advocate appeared on behalf of the Central State Farm and filed power He took time for filing reply. Thus, he submitted to the jurisdiction of the Tehsildar where the application of the petitioner Chandersingh under Section 148 of the Act was pending and, thus in the facts and circumstances of the case, seeking of adjournment for filing reply was a step in the proceedings. In view of this there is no question of stay of proceedings before the Tehsildar and for that matter' for referring the dispute to the Arbitrator as specified in the Agreement (Anx 1). This conclusion of ours finds support from the aforesaid dicision of the Supreme Court and this Court. Section 34 of the Act of 1940 could not be invoked for stay of proceedings and as such, a direction to refer the dispute arising out of the agreement (Anx 1) dated September 1, 1969 could not be made. It is not in controversy that the dispute between Chandersingh and the Central State Farm was a dispute out of the contract and in case, the Central State Farm had not taken any steps in the proceedings in the first instance, it should have referred to the Farm Superintendent for settelment and the decision of the Farm Superintendent was not acceptable, the matter would have been referred to the Operational Manager, whose decision has been made final. As the Central State Farm had taken steps in the proceedings, they could not be stayed and the matter could not be referred to the Arbitration. If the Central Farm wanted to take advantage of the arbitartion clause, it should have applied for stay of further proceedings before the Tehsildar but its counsel appeared and sought time for filing a reply. In this view of the matter, the Board had exceeded its jurisdiction when it held that the petitioner Chandersingh should pay the produce rent for the land given to him at the specified rate or cash price equivalent to the price prevalent at the time of Rabi harvest, 1969 as may be conventient and in case of any dispute should take recourse to arbitration as mentioned in Agreement (Anx. 1) dated September 8, 1969.

16. Learned Counsel appearing for the Central State Farm invited our attention to Punjab State v. Moji Ram (9) AIR 1957 Punj. 223. This case was noticed in Johari Mal's case . In Joharimal's case, it was observed as under:

Another exception to the rule has been recognized in Punjab State v. Moji Ram AIR 1957 Punj. 223. The learned judge after discussing the cases printed out whether a particular application to a Court amounts to a step in the proceedings depends on circumstances of each case and m particular to at can be laid down to determine it and applwing the to at, it was leed that when to file written statement is requested by a counsel, who had no authority from the defendant, cannot be cansidered a step in the proceedings.

Learned Counsel for the Central Farm cannot take its advantage an it is distiguishable on facts. Punjab State's case AIR 1957 Punj 223 and Joharimal's case were considered by their Lordships of the Supreme Court in State of U.P. case : [1974]1SCR31 . After noticing them, it was observed as follows.

that an application for adjournment was not made on instructions and was unauthorised and that he appeared as a mere volunteer not available to defendant State.

17. In Queens College Kanetra v. Collector, Varansi : AIR1974All431 , it was observed as under:

The true test for determining whether an act is a step in the proceedings' is not so much the questing as to whether it is an application but whether the act displays as unquivocal intention to proced with the suit and to give up the right to have the matter disposed of by arbitration. There must be submission to the jurisdiction of the Court for adjudication of the claim in the suit itself. The act of the defendant to get on exparte order of injunction vacated does not indicate an unequivocal intention to proceed with the suit and to give up the right to have the matter disposed of by arbitration. The adjudication of the injunction matter does not amount to adjudication of the claim in the suit itself.

The aforesaid decision is also distinguishable on facts.

18. For the reasons mentioned above, the writ petitions are allowed and the judgment and order (Anx.8) dated August 30, 1974 of the Board is quashed. In the circumstances of the case, the parties are directed to bear their own costs. The petitioner Chander Singh shall be entitled to the refund of the account that was deposited by him for being paid to the Central State Farm, Suratgarh.


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